wp 3.0-beta2-14489 and bp trunk do not play well together

I just installed a virgin copy of wp 3.0-beta2-14489, got it running and made sure all worked prior to uploading the buddypress plugin. Everything I tested worked well.

I then installed the multisite feature, and was able to create subdomain sites without any issues.

bottom line:
wp 3.0-beta2-14489 seems to work pretty good for me.

problem:
I just downloaded the buddypress Version 1.3-bleeding from the trunk and activated it.

Problems I noticed:
1. forums will not install, says install bbpress separately. Did not have this problem on prior installs of bp
2. All of the pages created by buddypress do not work, basically blank, and the homepage gets caught in an endless loop which causes no load.
— example link: http://mydreamhost.net/shawn/profile/
— I have no idea what is up with the permalinks.. having index.php in the middle is really screwy. I did change my permalinks to /%postname%/ which is what I use on my other bp installs.
3. The only thing I can think of is when I installed wp it said I did not have mod_rewrite apache installed. Which I know for a fact is absolutely wrong. This server runs a ton of wpmu sites, and I even checked to make sure mod_rewrite is on, and sure enough it is…. running php 5.2.6

I’ve installed so many bp sites in the past and have never run into this issue. It seems others here have bp working with wp 3.0beta, so I am stuck.. no idea what is wrong.